And now we move up! Friday, September 19, 2008
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Here are the latest news – a quick update for the early birds:
- US markets finally got a bounce on word of a potential government plan to take over the toxic assets
- Asia and Europe are in full rally mode with banks and some energy stocks up in double digits following the UK ban on short selling and news from the US in late closing yesterday
- It looks like Citigroup (C) is considering buying Washington Mutual (WM).
- SEC has also release a new rule banning shorting of financial stocks. Furthermore, they are also instituting a new institutional disclosure form for weekly short sale activity in non-financial stocks – reporting on a weekly basis!
We will no doubt see more strength but make sure you check the volumes and remain calm. As we said last week, don’t be fooled into buying the rallies and spikes, just to end up being forced to sell into the corrections…
Stiglitz – Financial Alchemy: 3 in 3 Thursday, September 18, 2008
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The fall of Lehman Brothers:
Stiglitz – Financial Alchemy: 2 in 3 Thursday, September 18, 2008
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Should we hold Lehman executives accountable?
Stiglitz – Financial Alchemy: 1 in 3 Thursday, September 18, 2008
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How foreign governments are buying America:
Running Money: A. Kessler Thursday, September 18, 2008
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“Hedge this! … Hedge Fund Honchos, Monster Markets and Hunting for the Big Score”
This is a really interesting book. Not only does it provide the excitement and insight of the hedge fund industry but it actually has lessons for the long-term value investor. Furthermore, readers should note that Kessler was a long only and value driven hedge fund manager and that he really focused on discovering hidden gems and not speculative buys. Once you pick up this book, you will most likely get through it in one or two reading sessions. To give you a better idea, it is like “Liar’s Poker”.
As the books states, “Running Money is an insider’s tale. Through witty and wacky stories, Kessler takes the reader on a tour of big-stakes investing, a bizarre trail of startup companies, anonymous investors and the occasional Elvis impersonator.” Running Money, also gives the reader much more. It highlights the need to follow the money flows and to work hard at trying to understand what the next trends will be and who holds the real competitive advantage… usually things are more complicated than they seem and you have to dig deep to get a hold on what is really going on. Moreover, Kessler finally details: “Why it’s imperative to drive a beemer, tote a toshiba laptop and watch a bigg-ass sony tv” – don’t worry, you” get it when you read the book…
Enjoy!
Watching Oil Wednesday, September 17, 2008
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Whilst everyone has been busy reporting and discussing about Lehman, Merrill and the AIG bail-out, the price of OIL has been steadily plummeting. In the following chart, we have plotted the last 3 month performance for the OIL ETF vs. the S&P500:
The graph is really incredible as OIL has gone down more than 30% vs. 10% for the S&P500. With Crude rapidly approaching the sub 90 USD level, it is going to be very interesting to see what happens and how this will effect the market and earning estimates…
Talking with Steve Jobs Tuesday, September 16, 2008
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To avoid the temptation of only talking about the current market turmoil, we are posting an interesting CNBC interview with Steve Jobs.
P.S. don’t forget to follow his advice and buy low and sell high!
Financials Update Monday, September 15, 2008
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We are officially in unchartered territory: Merrill has agreed to sell itself to Bank or America and Lehman will file for bankruptcy protection. What will happen next? Furthermore, AIG just announced that it is seeking a $40 billion bridge loan from the Federal Reserve.. are the insurance companies next?
Stayed tune for more…
MSCI EAFE Value Index Friday, September 12, 2008
Posted by ei-forum in ETFs.4 comments
Has anyone noticed that the MSCI EAFE Value Index (EFV) is trading at 2005 levels and is currently yielding over 6%? Obviously the suffering has been compunded by the fact that over 40% of the holdings are in the financial sector but this could be an interesting way to play the recovery, without the risk of investing in a company that will have to file for Chapter 11.
Yahoo! ETF Summary: The investment seeks investment results that correspond generally, before fees and expenses, to the price and yield performance of the MSCI EAFE Value index. The fund invests at least 90% of assets in the securities of its underlying index or in ADRs, GDRs or EDRs representing securities in the underlying index. It may invest the remainder of assets in securities not included in the index but which the fund’s manager believes may help the fund track the index. The fund may also invest other assets in futures, options and swaps related to the index, as well as cash and cash equivalents. It is nondiversified.
We still feel that this ETF has more downside but investors could start to build up their position…
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